The Beginner's Guide to Home Battery Storage Systems

23 Jun.,2025

 

The Beginner's Guide to Home Battery Storage Systems

Home solar panels are providing clean energy to more homeowners than ever before and lowering energy bills in the process. More and more people who go solar are also installing a battery, which can provide some backup power during an outage and, in some cases, boost your solar savings.

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If you’re looking to add a battery to your home (with or without solar panels) here’s what you need to know about how a home battery works, what it can do, and whether it’s a good fit for your home.

Understanding Home Battery Storage Systems

Home battery storage systems are large, stationary batteries that store energy for later use or during a blackout. While the Tesla Powerwall is the most widely known and installed home battery, the playing field is getting more crowded.

Home batteries can charge using grid power or solar power to use when the sun or the grid goes down. 

Today’s batteries often come with energy management algorithms that let you set different priorities for your battery and solar system. Whether you want to use and store as much solar power as possible before sending it back to the grid, avoid buying electricity at the most expensive times, or just keep your battery charged up in case of a blackout, modern batteries can do that.

Battery systems require a few additional components, like an inverter (which converts the battery’s direct current electricity to the alternating current your house and the grid uses), mounting hardware, and additional wiring. Most battery manufacturers also have an app for managing your battery’s charge level and settings.

Batteries configured to back up your home in case of a power outage will have additional equipment and wiring that lets the battery isolate your home from the grid and send power to select circuits. Batteries without backup capabilities require less hardware and labor, making them less expensive projects overall.

The most common type of battery uses lithium-ion chemistry, like bigger versions of the batteries that power your or laptop. As battery technology matures, more flavors of the lithium-ion battery are popping up and entirely new battery chemistries could be on the horizon. Lithium iron phosphate batteries are a newer chemistry that is a bit safer, longer lasting, and better at high and low temperatures than some earlier lithium-ion batteries. That makes it an increasingly popular choice for home storage. Older lead acid batteries are less common in home energy storage but sometimes play a role.

Why Consider a Home Battery Storage System?

Home batteries have plenty of benefits which vary with how you use them.

Energy independence

Batteries can protect you from blackouts, which have been increasing in frequency thanks to more severe weather and aging transmission infrastructure. On their own, batteries can keep your home’s essentials powered up during an outage, though without a way to charge, a battery may not get you through an extended outage.

Paired with solar panels, which can charge a battery throughout the day, home battery storage systems can keep your essentials running through an extended outage. The appliances you want to power with your batteries will determine how many you need. How much power those appliances require to both start and run are important considerations.

Batteries are essentially a requirement to keep solar panels running during a blackout. Without a backup battery, solar panels are designed to shut down with the grid for safety reasons.

Cost savings

Solar panels are financially beneficial in two ways: They let you avoid buying energy from your utility and, where programs are available, they let you sell energy back to it at the most valuable time.

Without a battery, solar panels let you avoid buying grid energy when the sun is out. Storing extra energy for later use can let you avoid even more.

Many utilities compensate you for the electricity your solar panels send back to the grid, though at different rates throughout the day. Storing that energy to sell back to the grid at the most valuable time is another way to boost the value of your solar panels. This is how it works for many Californians, thanks to NEM 3.0. In many other parts of the country, batteries may not save money, so their value comes from their backup ability.

Increased solar utilization

Just like you can store electricity and use it to maximize your savings, you can do it to maximize the amount of clean solar energy you use. By storing extra solar power and using it later, you can maximize your savings and your environmental impact.

Choosing the Right Home Battery Storage System

Choosing the right home battery requires matching it to your energy goals. Here’s what sets batteries apart.

Capacity: Capacity, measured in kilowatt-hours, is how much actual electricity a battery stores. A Tesla Powerwall has a 13.5 kWh capacity. A Generac PWRcell has a starting capacity of 9 kWhs that can increase in increments of 3 kWhs up to 18 kWhs.

Power rating: Power output is typically given in two numbers: continuous and peak. Continuous output is how much power the battery can release at a continuous rate. Peak output is how much a battery can release over a shorter time, typically a few seconds. Since many appliances require a brief burst of energy to start up, peak output is an important factor.

Warranty and lifespan: Like any battery, home batteries degrade with time and use. Warranties are typically measured in years and charge-discharge cycles. If a warranty guarantees 70% capacity for 10 years and 7,000 cycles, you should have at least 70% of the battery’s original capacity at least until reaching either of those benchmarks.

Efficiency: No battery system is 100% efficient. A battery with a 90% efficiency will give you 9 kWhs of electricity for every 10 kWhs you put in.

To get an idea of how much energy capacity and power output you need, first decide what you’ll need in an emergency. The fewer appliances you back up, the less battery capacity and power required. A professional battery installer will be able to advise you, but you can get an idea by looking at the appliances you want to back up.

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You can find your appliances’ energy requirements on a sticker attached to the appliance itself or in the owner’s manual. In my apartment, my refrigerator draws 517.5 watts, my microwave draws watts, and my water heater draws 4,500 watts. If all of those were running continuously for an hour they’d consume about watt-hours, or 6.5 kWhs, about half a Powerwall’s capacity. None of these appliances run continuously, though.

Another way to think about your battery capacity needs is through your average consumption. In , the average American household bought about 900 kWhs of electricity each month, or about 30 kWhs each day, though you’ll likely use less when trying to conserve energy during a blackout.

Here’s the base capacity of leading home batteries today.

  • Tesla Powerwall 3: 13.5 kWh
  • Generac PWRcell: 9-18 kWh
  • sonnenCore: 10 kWh
  • LG 10H Prime: 10 kWh
  • Enphase IQ10: 10.5 kWh

Installation and Maintenance

The vast majority of people should hire a professional to install their batteries. The installation process may vary by installer but generally follows a few typical steps.

  1. Site assessment: A battery installation professional comes and surveys your home for the best place to install the battery.
  2. Energy audit: If your battery is being installed with solar, the installer will want to get an idea of your energy consumption to correctly size your systems.
  3. Permitting: A standalone battery may need permits to be installed and permission from the utility to feed energy back to the grid, just like a solar system.
  4. Inverter installation: Your battery may need an additional inverter to convert the DC electricity it stores into the AC electricity your house uses.
  5. Mounting: The battery will be installed, usually on a wall or the floor.
  6. Connection: Your battery will be connected to your house’s electrical system and tested to make sure it’s working.
  7. Monitoring: Monitor your battery’s charge and performance through the manufacturer's app.

Lithium-ion batteries are low-maintenance technology. Aside from making sure you don’t drain them too low — which may be automated — as long as you don’t physically harm them, you shouldn’t have any problems.

Your battery will degrade, though that’s not something to worry about. Most batteries have a certain level of degradation covered in their warranty. If you believe your battery is performing below that level, contact the manufacturer.

A very small number of batteries have caught fire from a process known as thermal runaway. It’s not common but is more likely with damaged, poorly manufactured, or poorly installed batteries. If your battery is damaged after installation, get it inspected by a professional.

Home Battery Storage Systems Costs

A home battery installation can cost more than $10,000, but it can enhance your solar savings and provide non-monetary benefits like keeping important systems powered up during an unexpected blackout.

Government incentives, like the 30% clean energy tax credit, can lop thousands of dollars off of that cost. Utilities may also have battery incentives. Xcel Energy offers rebates for batteries if you participate in occasional ‘control events,’ where the utility takes some of your battery’s stored energy to meet peak demand. Other utilities or third-party companies offer similar incentives.

Of the people who install home batteries, over 50% do so primarily for backup power, according to a survey of installers by SolarReviews. But even when the goal is resilience, batteries can earn some money back by joining a virtual power plant to send power to the grid when it’s needed.

Paired with solar, a home battery storage system can save you money in places where avoiding grid electricity is more valuable than sending solar power back to your utility. The percentage of solar installations with batteries attached jumped from 10% to 60% after California utilities changed from a net metering system to a net billing one, according to the Lawrence Berkeley National Laboratory.

Future Trends in Battery Storage

Even though modern battery technology is sophisticated and capable, more innovation is on the way.

As big batteries become more common at homes and in cars, they’ll likely get cheaper. That would continue the trend of the last decade, according to BloombergNEF, which says battery packs cost $139/kWh in , down from $780/kWh in . BloombergNEF predicts prices as low as $80/kWh in . (This price isn’t for the finished product and includes batteries used in vehicles and stationary storage, like at home. It’s not representative of the price you’ll pay an installer, but does illustrate a real trend in price.)

Batteries will also likely get smarter. Many batteries can already work with complicated utility rates to help you avoid buying the most expensive electricity. As homes get more internet-connected devices, batteries will have more potential to be more specific and nimble in how they power your house. Technology like smart electric panels and breakers will increase their flexibility.

Batteries also stand to play a large role in the energy transition as more wind and solar power are added to the grid. Since the sun doesn’t always shine and the wind doesn’t always blow, storing energy for later use will be necessary. Expect virtual power plants and other compensation schemes for residential batteries to continue and expand.

Does a Home Battery Make Sense for You? 

Home battery storage systems offer resilience and additional energy savings, especially when paired with solar. They can help you weather a blackout, avoid expensive grid electricity, and let you use power from your solar panels, even after the sun goes down. Depending on where you live, your savings could be even greater with additional storage incentives or the option to join a virtual power plant.

To find out how solar and storage can reduce your monthly electric bill, start with Palmetto’s solar savings Cclculator and reach out to one of our solar advisors today for a personalized solar quote.

Frequently Asked Questions

Are solar home battery storage systems worth it?

Batteries can save you more money than standalone solar in some parts of California. In other places, they may not pay for themselves in savings, but can provide valuable emergency backup power that’s cleaner and quieter than a generator.

Can a battery back up my house?

Backup batteries can provide emergency electricity during an outage. Often, they backup specific circuits in your home that power essential appliances or devices. You may have the option to set your battery up as an arbitrage, or consumption only, battery. These battery configurations don’t offer backup power.

Disclaimer: This content is for educational purposes only. Palmetto does not provide tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors.

If you are looking for more details, kindly visit Home Lithium Battery.

Build a LiFePO4 battery or buy one already made?

I know from a cost perspective that it's cheaper to put together your own LiFePO4 battery than buy one ready made, but I'm wonering which is more reliable? Assuming that I purchase Grade a cells and good quality BMS.

I've looked at Battle Born, SOK, LiTime, Lion Energy and others. All of which have some sort warranty, some have 10 year, some 5 year, some less. I haven't read all of the warranty documents, but I have read a few. So far everyone I've read says that they will fix or replace the battery at their descretion. Which means that they get to decide if they want to honor their warranty or not. I guess this makes sense because a perfectly good battery can be ruined if connected wrong or treated improperly. What surprised me however was that none of the warrantees covered shipping costs or any of thee damage done in shipping. So it is possible that you could spend more on shipping than the battery is worth, except possibly with a Battle Born. They are still crazy expensive and frankly not in consideration, even though they come with a 10 year warranty. For instance a 12V LiTime 100AH with low temp protection is now selling for $279.99. I can't imagine with it would cost to ship it back and forth to China for repair, but its got to more than $279.99. So in my opinion, the LiTime warranty is basically worthless.

So how reliable are these batteries? Is a DIY LiFePO4 (using grade A cells and good BMS) more reliable than store bought? I'd say it depends on the amount of storage you are looking at. For 5kWh it would not be much more cost effective by the time you've added all the bits (BMS, housing, fuses etc). But if you are looking at 15kWh+, then yes, still cost-effective. I have a DIY 280Ah (14.3kWh) system, which worked out about 2/3 of the price of buying 3 x 5kWh racks. That's with buying everything locally, apart from the BMS that came direct from Florida.

And for me having better control over the system is more important, so I'd go DIY even if it cost a bit more ?‍?

As for reliability - time will tell... but apart from the cells themselves (which I have a spare) and the BMS (easily replaceable) then the rest is all my own work which I trust more than any commercial offering.

Solar-wise, I've only ever had to have a Victron component replaced, which was done without question, but it still took 2 weeks to send it back for testing before a new one was sent out - had that been a critical component, it would have been an unacceptable delay. So I prefer to 'self-warranty' and fix things myself wherever possible - but obviously everyone's mileage may vary, depending on skills, tools and how critical the system is.
Most companies have a grace period for shipping damages and you just need to take pics and contact them within that grace period and they will replace it.

I have had many batteries shipped and all were well packed with no damage even with some of our stupid fed ex drivers here. UPS seems to be better at handling the packages.

You are more likely to get damaged cells and products ordering from overseas shippers like Ali Baba and I have gotten damaged products from them a few times. Those shipments are rough handled and may transfer between planes, ships and camels before it gets to you.

I've yet to find any of the warantees mention any grace period about free shipping due to defects. The only grace period I've seen mentioned is for returns. Most give you up to 30 days to return unwanted items, but they almost always include a restocking fee. Typically the warranty includes statements that clearly state shipping there and back isn't free. The statement below is from the SOK warranty.

What does this limited warranty cover?​

This Limited Warranty covers any defects in material or workmanship under normal use during the Warranty Period.

During the Warranty Period, SOK Battery will repair or replace, at no charge(but NOT including the round shipping fee during warranty time), products or parts of a product that proves defective because of improper material or workmanship, under normal use and maintenance.

I'm only looking to build a 12V 400AH-500AH LiFePO4 battery bank for my travel trailer. I can do a DIY or I can buy assembled batteries. I'm wondering which way is more reliable. Do you work on your own car? Do you enjoy maintaining most of the plumbing & electrical at home? If yes, you might be a good candidate for a DIY lifepo4 build.

In my opinion, purchasing from a reliable, proven source (typically US-based) is your best way to minimize major problems. That goes for pre-built or individual DIY purchases. Don't order until you're prepared to build and test thoroughly. On average, you may be good for 30 days of return/tech support, after that be prepared to be on your own. As for warrantees, if they deliver at all, consider that icing on the cake---placing upfront value on a warranty can easily disappoint.

When/if you DIY you may learn, whether you want to or not, everything you did or didn't want to learn about lifepo4 cells and BMS's. It's part of the territory. If this doesn't sound the least bit appealing---recommend a hard-pass on DIY.

Doing it DIY, you're in the best position to deal with issues---you built it, odds are high you can fix it. With pre-built you're at the mercy of the manufacturer or seller.

As for whether pre-built or DIY offers the best value, what's your time and knowledge gained worth to you?

Good luck!
I know from a cost perspective that it's cheaper to put together your own LiFePO4 battery than buy one ready made, but I'm wonering which is more reliable? Assuming that I purchase Grade a cells and good quality BMS.

I've looked at Battle Born, SOK, LiTime, Lion Energy and others. All of which have some sort warranty, some have 10 year, some 5 year, some less. I haven't read all of the warranty documents, but I have read a few. So far everyone I've read says that they will fix or replace the battery at their descretion. Which means that they get to decide if they want to honor their warranty or not. I guess this makes sense because a perfectly good battery can be ruined if connected wrong or treated improperly. What surprised me however was that none of the warrantees covered shipping costs or any of thee damage done in shipping. So it is possible that you could spend more on shipping than the battery is worth, except possibly with a Battle Born. They are still crazy expensive and frankly not in consideration, even though they come with a 10 year warranty. For instance a 12V LiTime 100AH with low temp protection is now selling for $279.99. I can't imagine with it would cost to ship it back and forth to China for repair, but its got to more than $279.99. So in my opinion, the LiTime warranty is basically worthless.

So how reliable are these batteries? Is a DIY LiFePO4 (using grade A cells and good BMS) more reliable than store bought?
I can't speak for the chins but my Redodo 12v 100Ah minis shipped from a US warehouse and were delivered in 2 days and would be returned to a US address if needed. I'm pretty sure if you have an issue they just ship you a replacement and don't worry about the return due to shipping requirements for lithium etc. I build batteries and have been doing so for a while and I feel I better Chime In here.
- It is not that hard to do but it is not a simple slap-it-together deal, unless you want troubles.
There are tools required ! That costs money and a few things that can't be skimped on either such as a good quality Digital Multimeter (at least 2 decimal point accurate) with DC Clamp. Wire cutters, crimpers (Lugs & Terminals) and more... Of course a DC Charging Powersource to top balance etc... This stuff adds up FAST... some of us have the gear because we are into electronics etc but there is always something we don't have.

The Question, if you have the tools & equipment, then DIY is a great option, but if you do not have the tools etc, will that "investment" have more life beyond building the batteries or not ? That can only be answered by YOU !

Cells, Cases, BMS' etc are all easily obtained and there are Known Good Vendors that have been supplying the membership here for quite some time. You can build Larger Capacity batteries than those on offer by most vendors.
! Take 48V Rackmounts, they are mostly 100AH, a few get to 200AH but not beyond that.
A 48V/100AH Pack weighs 47kg (103.6lb) +/- Where a 48V/280AH weighs 135Kg (297lb) +/- a bit. and can't be mounted into a rack for obvious reasons.
I build batteries and have been doing so for a while and I feel I better Chime In here.
- It is not that hard to do but it is not a simple slap-it-together deal, unless you want troubles.
There are tools required ! That costs money and a few things that can't be skimped on either such as a good quality Digital Multimeter (at least 2 decimal point accurate) with DC Clamp. Wire cutters, crimpers (Lugs & Terminals) and more... Of course a DC Charging Powersource to top balance etc... This stuff adds up FAST... some of us have the gear because we are into electronics etc but there is always something we don't have.

The Question, if you have the tools & equipment, then DIY is a great option, but if you do not have the tools etc, will that "investment" have more life beyond building the batteries or not ? That can only be answered by YOU !

Cells, Cases, BMS' etc are all easily obtained and there are Known Good Vendors that have been supplying the membership here for quite some time. You can build Larger Capacity batteries than those on offer by most vendors.
! Take 48V Rackmounts, they are mostly 100AH, a few get to 200AH but not beyond that.
A 48V/100AH Pack weighs 47kg (103.6lb) +/- Where a 48V/280AH weighs 135Kg (297lb) +/- a bit. and can't be mounted into a rack for obvious reasons.
That's 100% correct. If you add everything up, especially the tools, building yourself offers no large financial benefits.
The real benefit is that you know and understand the system and can decide what bms you want etc.
I am an engineer with a lot of experience with large 48V and 53V DC power plants. I am normally a DIY type of person. I do my own appliance repairs and I do the maintenance on my own vehicles. I've restored 5 "handy-man special" homes, inluding upgrading thier electrical panels. I also have an extensive collection of tools, meters, etc.. Having said that I would need to buy a variable DC power supply if I decide to put together my own LiFePO4 battery. So I'm sure that I have the skills and tools to build a battery. My quesquestion has more to do with reliability. Unfortunately I don't have any experience with LiFePO4 cells and I don't how reliable they are. So I'd like to hear your opinions on whether ready made 12V batteries more or less reliable than the DIY batteries. I am honestly leaning towards building my own battery, but I don't know how reliable those 3.2V cells are.
We purchased a DC power supply to top-balance our first build. Quickly transitioned to installing Heltec 5a active balancers (with an off/on switch) for subsequent builds. The Heltecs do a fine job of top-balancing. Only takes a few hours with large deltas---smaller deltas, less than an hour. Plus they can be easily switched on to top-balance, as needed, down the road. Rewiring a battery pack, after the fact, to top-balance with a DC power supply is a PITA. The DC power supply has come in very handy for various other electrical projects and testing, but we no longer use it for top-balancing.

Once you start doing DIY builds you'll find the very least of your worries is reliability. Cell failures are extremely rare. BMS's may occasionally fail, but they're very easy to replace. Your biggest concern, by far, is hoping the vendor sells you a well-balanced set of cells. Top-balancing can't fix cells that have inherently different ah capabilities. This is why purchasing from a reputable source is important.